Stock Exchange Stakeholders to meet members over UT Bank collapse
| Updated Aug 17, 2017 at 12:00pm
The Association of Shareholders on the Ghana Stock Exchange is to meet its members in the coming days over the collapse of UT Bank which has placed their fate in the balance.
The meeting will seek to calm nerves and reassure the members that their investments in the failed UT Bank are in safe hands but will only be determined after the situation has normalised.
Although UT and Capital Banks collapsed, the shareholders will only be interested in what happens to their holdings in UT Bank, given that it was listed on the Ghana Stock Exchange (GSE).
The President of the association, Mr Sas George, told Graphic Online Thursday morning that the education would be done by personnel from the Central Securities Depository, which serves as a vault for investments information in the country.
“We want to educate our members about this takeover. We want to tell them that they should not bother or worry because their monies are in good hands at the Central Securities Depository,” he said.
The Bank of Ghana on Monday revoked the licences of UT and Capital Banks after they were found by the central bank to be heavily deficient and illiquid in capital.
Following the revocation, the central bank approved a purchase and assumption (P&A) agreement with the GCB Bank to assume ownership of the deposits and selected assets (performing assets) of the now defunct banks. The BoG and GCB Bank are yet to define what constitutes a performing asset in this case.
The revocation of the license and the approval of a P&A was in conformity with the Banks and Specialised Deposits taking Institutions Act, 2016 (Act 930), which was passed last year to help define a mechanism that the central bank could fall on to protect deposits whenever banks go through distress circumstances.
Although the action automatically transferred customers and employees of the erstwhile banks to the largely state-owned GCB Bank, it placed the fate of shareholders of the two banks in the hands of PricewaterhouseCoopers (PwC), a consulting firm that has been appointed a receiver in line with Act 930.
Read also: UT and Capital banks were on life support for 2years - BoG explains.
Given that GCB Bank did not take over the entirety of the two failed banks but only their deposits and performing assets, shareholders of the two banks cannot be transferred to the enlarged GCB but could possibly be paid off through a scheme that will be devised by PwC later.
While this creates some vacuum, Mr George of the Association of Shareholders said there was need to panic.
“Our shares are held at the moment by the Stock Exchange until things are normalised,” he said.
“It’s a simple thing and all money in UT or Capital Bank is secured because all the shares we bought are recorded at Central Securities and they will not deny that,” he explained.
Graphic Online understands the depository has since sent details of investors’ holdings in the various stocks on the Ghana Stock Exchange to help calm nerves among affected investors.
As of December 2013, UT Bank had 456.3 million shares in the hands of 9,838 shareholders.
SOURCE: Daily Graphic